Mr. McGregor lived in China for 15 years and has had personal and business relationships with the country since 1985 when he became convinced that China would be the most interesting place in the world during his lifetime. His deep knowledge of the country and its culture were apparent in a presentation which wove history and cultural perspectives in with business realities.
Mr. McGregor maintains that it is an accident of history that China is communist because in reality the culture and the people are the most “ferociously entrepreneurial” on earth – when you talk business with the Chinese, even on a new topic – they “will finish your sentences for you.” It is in the interplay between the culture and the government that many of the disconnects between the West and China come into play – and this often confusing interplay arises from China’s unique history.
For those wishing to do business within China there are certainly difficulties. McGregor raised the question: “how corrupt is China?” and then answered “very.” Although there is a solid foundation of law, he also stated that “it will take another generation or two to get an effective and just court system." In addition, according to McGregor, China is a “shame-based” culture – so “it’s not about right or wrong – it’s about getting caught and facing great shame”. Put these two things together and add in the political situation, and this is a very unfamiliar situation for Westerners.
The political situation is well illustrated by the September 10th announcement by Xinhua, the Chinese news agency and propaganda arm, that Xinhua will control all news coming into China. This echoes the situation ten years ago, when Xinhua made a similar pronouncement, after which McGregor was involved in a successful, several-year effort to convince China to back down. For publishers this latest announcement means no direct contact with customers – everyone must work though an agency which Xinhua will name (e.g. a subsidiary of Xinhua). McGregor put it in the strongest possible terms that if the industry does not come together and go back to negotiate there will be no reason to do business in China. A successful negotiating strategy will include Chinese self-interest – for example, if news to traders is censored, the Chinese financial market will be negatively affected.
When questioned from the audience about Scientific, Technical and Medical (STM) information in China, McGregor said that the government has attempted a “land grab” on such information in the recent past, but did back down – the point that certain kinds of information are not political can be successfully made. He also said that within a decade China will be a science and technology innovator, particularly in telecommunications, alternative energy and stem-cell research.
McGregor’s summary points were that: 1) it is absolutely imperative that the West make an effort to understand China so that we will successfully engage with a country that is in fact making astonishing progress in education, commerce and life-style ;2) publishers must join together in negotiating on behalf of the industry whenever the Chinese government attempts a land-grab. Understanding and patience will, McGregor believes, ultimately be rewarded – interpreting China through our own experience and values could be disastrous.
The good news here is that the Chinese love and understand business and that negotiation can be successful. Anyone planning to do business in China needs to be prepared with knowledge of Chinese culture and needs to be prepared for lengthy – and repeated – negotiations. Caution with intellectual property is advised, but it is certainly possible to get into the game through the careful selection of partners and the products to be launched into this important market. Outsell takes note of McGregor’s call for an industry-wide approach to challenges such as the recent Xinhua announcement – going it alone when dealing with the Chinese government will not be a winning strategy.
